Tag: Motley Fool

Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Evolution Mining Ltd (ASX: EVN)

According to a note out of Credit Suisse, its analysts have upgraded this gold miner’s shares to an outperform rating with an improved price target of $6.55. The broker made the move after lifting its gold price forecasts for 2021 and 2022. Credit Suisse is expecting the price of the precious metal to stay higher for longer. It expects it to command a price of US$2,500 an ounce next year and then US$2,200 an ounce in 2022. This will make Evolution highly profitable given its low cost operations. I think Credit Suisse makes some great points. If the gold price does climb to these levels then Evolution would be a standout pick.

JB Hi-Fi Limited (ASX: JBH)

A note out of the Macquarie equities desk reveals that its analysts have upgraded this retailer’s shares to an outperform rating and increased the price target on them to $53.70. The broker notes that consumer spending has been strong in the current quarter. This is likely to mean JB Hi-Fi has been performing very positively so far in FY 2021. Furthermore, it expects this to continue over the remainder of the calendar year and be supported by new phone releases from Apple. While it isn’t my favourite retail share, I think it could be a good option for investors.

Vocus Group Ltd (ASX: VOC)

Analysts at Goldman Sachs have put this telco on their conviction buy list with an improved price target of $4.70. It likes Vocus as it is the only telco forecasting growth in FY 2021. In addition to this, it sees opportunities for the company to crystallise value by offloading non-core assets such as Vocus Energy. I think Goldman makes some good points and Vocus could be worth considering.

More reading

• These were the best performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

IGO Ltd (ASX: IGO)

According to a note out of Ord Minnett, its analysts have retained their sell rating and cut the price target on this nickel producer’s shares to $3.50. The broker isn’t a fan of IGO due largely to its belief that its assets are declining in quality. It also notes that the company’s outlook over the coming years is rather subdued. The IGO share price ended the week at $4.57.

Spark New Zealand Ltd (ASX: SPK)

Analysts at Goldman Sachs have retained their sell rating and $4.00 price target on this telco’s shares. Based on its outlook and current share price, Goldman believes that Spark is one of the most expensive incumbent telecommunication companies globally. In light of this, it sees no reason to buy its shares ahead of other more attractively priced peers. The Spark share price closed the week at $4.25.

Xero Limited (ASX: XRO)

A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this business and accounting software platform provider’s shares to $72.00. According to the note, UBS believes there’s a lot to like about Xero. It notes that a recent survey shows that Xero is highly regarded by accountants and cloud accounting penetration growth remains solid. However, due to its valuation and concerns over higher than normal business closures because of the pandemic, the broker retains its sell rating. The Xero share price ended the week notably higher than this price target at $92.12.

More reading

• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower
• 2 fantastic ASX growth shares to buy with $2,000 today
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%
• Buy and hold these ASX shares to grow your wealth
• Apple, Amazon, Microsoft are bigger than EVERY unicorn combined

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last week the S&P/ASX 200 Index (ASX: XJO) bounced back from a heavy decline a week earlier with the smallest of weekly gains. The benchmark index rose 0.1% over the five days to 5,864.5 points.

Another busy one is expected next week. Here are five things to watch on the ASX 200:

ASX 200 futures pointing lower.

According to the latest SPI futures, the ASX 200 is poised to start the week deep in the red. Current futures contracts are pointing to a 36 point decline at the open on Monday. This follows a disappointing end to the week on Wall Street on Friday. Further weakness in the tech sector led to the Dow Jones falling 0.9%, the S&P 500 dropping 1.1%, and the Nasdaq index tumbling 1.1%. This meant Wall Street recorded its third weekly decline.

Brickworks FY 2020 result.

The Brickworks Limited (ASX: BKW) share price will be one to watch on Thursday when it hands in its full year report card. The building products and property development company wasn’t a particularly positive performer during the first half of FY 2020. It posted a 1% increase in total revenue to $449 million and a 37% decline in underlying net profit after tax to $100 million. However, trading conditions in the United States have improved over the last few months, which could have boosted its second half performance.

Tech shares on watch.

It looks likely to be another volatile week for the Australian tech sector after a disappointing decline on the Nasdaq index on Friday. Investors appear undecided on whether or not the tech rout is finally over. This could mean another five days of ups and downs for the likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX).

Premier Investments full year results.

Premier Investments Limited (ASX: PMV) is expected to release its full year results on Friday. According to a note out of Goldman Sachs, its analysts expect the company to report net profit after tax of $152.2 million on a pre-AAB16 basis or $138.8 million adjusted for AASB-16. The latter is up 11.1% year on year. Its analysts are also forecasting a fully franked 20 cents per share final dividend, down from 37 cents per share a year earlier.

Soul Pattinson result.

More reading

• How to generate $1,000 a month in dividends
• These were the best performing ASX 200 shares last week
• Is it time to save more or invest more in ASX shares?
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks, Premier Investments Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think there are always ASX share opportunities to buy for our portfolios, you just have to buy them when they’re good value. I know where I’d invest if I had $20,000 to allocate.

The share market has proven to be a good wealth builder for decades. I think that’s going to continue for many years to come.

With $20,000, I’d buy these ASX shares for the long-term:

Pushpay Holdings Ltd (ASX: PPH) – $6,000

Pushpay is my highest-conviction individual share idea at the moment. The ASX share facilitates digital donations to organisations like large and medium US churches.

The company was growing pleasingly before COVID-19 hit, but the pandemic has caused Pushpay’s adoption to be brought forward as more people stay home, avoid groups and change to giving electronically rather than giving cash. A big benefit of Pushpay’s offering is that it also has a livestreaming option so that churches and congregations can stay connected.

In FY20 the ASX grew its revenue by around a third. In FY21 it’s expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF). Those are good growth numbers. 

The company is aiming for US$1 billion of revenue from the US church sector over the long-term. There are plenty of other ‘donation markets’ that Pushpay can expand into over the coming years.

One of the main things that attracts me to Pushpay is how scalable it appears to be. In FY20 alone it increased its gross profit margin by five percentage points from 60% to 65%.

At the current Pushpay share price it’s trading at 34x FY21’s estimated earnings.

WAM Microcap Limited (ASX: WMI) – $4,000

WAM Microcap is my preferred listed investment company (LIC). I think investors can generate strong outperformance by focusing on small caps, if you know what you’re doing. The LIC targets ASX shares with market capitalisations under $300 million. The WAM team are very good at this. 

Past performance is not a guarantee of future performance at all. However, it must be said that WAM Microcap has done a good job of producing strong performance over the long-term with average gross portfolio returns of 21.7% per annum since inception in June 2017 (before fees, expenses and taxes). Over the past year it has done well too, with a gross return of 25.4%. I don’t think you can expect future returns to be as good as that, but it could keep doing well.

WAM Microcap offers an ordinary grossed-up dividend yield of 5.6%. It also seems to be trading close to its pre-tax net tangible assets (NTA) per share at 31 August 2020. So it’s a fair price to buy shares. 

Bubs Australia Ltd (ASX: BUB) – $3,000

Bubs is my preferred high-risk, high-reward idea at the moment. I think the goat milk infant formula producer has very good potential if it can capture market share in Asian markets like China and Vietnam.

So far it’s working really well. In FY20 Bubs grew total revenue by 32% to $62 million. Chinese direct sales went up 32% to $13 million. That’s good growth from the ASX share.

What particularly excites me is that export revenue outside of China increased five-fold and represented 10% of total revenue in FY20. It’s this area of the business that particularly excites me because of the size of the total addressable market.

Bubs has a variety of products that can all continue to grow strongly over the coming years and lead to rising profit margins for the ASX share.

The Bubs share price has fallen 13% over the past month. I think it represents very attractive value for how much potential growth there is outside of China. Of course, there are China risks but I think the company is doing the right things to grow market share there with its localised production strategy.

Future Generation Global Invstmnt Co Ltd (ASX: FGG) – $7,000

Future Generation Global is another good LIC in my opinion. It invests in the funds of Australian fund managers who invest in overseas shares. It has money with top managers like Magellan Financial Group Ltd (ASX: MFG), Cooper Investors, Caledonia and Marsico.

However, these fund managers work for free so that Future Generation Global can donate 1% of its net assets each year to youth mental health charities. It’s a great initiative, particularly during these times. 

The great thing about Future Generation Global is that it offers very good diversification because it’s invested in a number of portfolios, not just individual businesses.

Its gross portfolio performance has been better than the MSCI AC World Index (AUD) over both the short-term and the long-term.

Outperformance and diversification are the main reasons I’m willing to invest so much of my theoretical $20,000 into it.

At the current Future Generation Global share price it’s priced at a 17% discount to the NTA at 31 August 2020. That’s a very nice discount in my opinion. 

Foolish takeaway

I think all four of these ASX shares could be good buys to beat the market over the long-term. Pushpay is the one I’d be most likely to buy, however I’d happily buy shares of them all for my portfolio.

More reading

• How to generate $1,000 a month in dividends
• Where to invest $10,000 into ASX shares immediately
• Why I’m more excited about WAM Microcap shares
• 3 ASX growth shares I’d buy right now
• Why you should invest $5,000 into these ASX shares right now

Tristan Harrison owns shares of Future Generational Global Investment Company Limited and WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and PUSHPAY FPO NZX. The Motley Fool Australia has recommended BUBS AUST FPO and PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I believe there are some ASX shares that offer an attractive combination of growth and income.

Businesses that are steadily growing profit are likely to see the share price rise over time. If they decide to pay dividends (or distributions) then they can also provide a growing source of income to shareholders.

Here are three ASX shares that could offer an attractive combination of income and growth:

Magellan Global Trust (ASX: MGG)

This is a listed investment trust (LIT) which invests in global businesses. Indeed, the LIT tries to invest in the best businesses across the world.

It’s run by Magellan Financial Group Ltd (ASX: MFG), with billionaire Hamish Douglass at the helm. The unlisted Magellan Global Fund, which is similar to the LIT, has been around for over a decade. Looking at the past 10 years, net returns from the unlisted fund have been 16.1% per annum. That’s a solid record.

I think Magellan Global Trust’s existing group of investments can do very well over the next few years. Some of its current largest exposures are: Alibaba, Alphabet, Atmos Energy, Eversource Energy, Microsoft, Tencent, Facebook, Visa, Mastercard and Reckitt Benckiser.

The ASX share targets a 4% distribution yield for investors. Based on the current Magellan Global Trust share price and net asset value (NAV), it’s trading at a 3% discount.

Clover Corporation Limited (ASX: CLV)

What is Clover? The company says that it has superior microencapsulation technology to enable nutritional oils, such as tuna, fish, algal and fungal oils, to be added to infant formula, foods and beverages. It claims its products reach the highest standards of purity, stability and performance, allowing customers to maximise and deliver nutrition whilst masking unpleasant taste and odour.

The Clover share price dropped 8% in reaction to the FY20 result despite it showing solid growth numbers. Sales revenue increased by 15.1% and net profit after tax (NPAT) rose by 23.6% to $12.5 million.

The company continues to see growth across the world and it’s excited by the potential for new products and partnerships, particularly in Europe after infant formula manufacturers adjust their formulations to meet the new EU standards.

There were delays at the Melody Dairies nutritional spray dryer because customer audits have been impacted by COVID-19 preventing travel, which will slow production volume initially.

If net profit can keep rising at an attractive double rate then its share price could keep rising over the coming years as well.

The ASX share also increased its final dividend by 5% to 2.5 cents. At the current Clover share price it offers a grossed-up dividend yield of 1.6%. The dividend could keep rising by double digits each year if net profit keeps growing strongly.

BWX Ltd (ASX: BWX)

BWX is a natural beauty business that manufactures and sells through a variety of brands including Sukin, Andalou Naturals and Mineral Fusion.

Before COVID-19, the natural beauty industry was growing even faster than ‘regular’ beauty.

BWX is certainly growing its market share at an impressive rate. In FY20 it grew net revenue by 26% to $187.7 million, earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 30% to $27.5 million and statutory net profit rose 59% to $15.2 million. Pleasingly, the gross profit margin improved to 58%.

I’m excited by BWX’s growth potential. It is expanding its distribution network across the world with Sukin being rolled out in the northern hemisphere. Andalou Naturals is being brought to customers in Australia.

In FY20 the ASX share grew its dividend by 44% to 3.9 cents per share. That’s a big increase, yet the dividend growth was slower than the reported statutory growth, which is a healthy way to do it.

At the current BWX share price it offers a grossed-up dividend yield of 1.1%. It’s trading at 24x FY23’s estimated earnings.

Foolish takeaway

The valuations of both BWX and Clover seem reasonable for how much growth they could make over the next few years. Whilst you own them, you will receive a decent, (probably) fast-growing dividend. Magellan Global Trust offers diversification and exposure to some of the best businesses in the world, though I think it will be better value later this year.  

More reading

• How to generate $1,000 a month in dividends
• ASX 200 drops 0.3%, gold miners keep rising
• Clover (ASX:CLV) share price falls 10% on FY20 results
• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today
• Magellan (ASX:MFG) reveals best share buys for September

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I continue to believe that the best way to grow your wealth is to make long term investments in quality shares with strong business models and just as strong growth potential.

Three shares that I think could generate outsized returns and potentially allow investors to retire rich are listed below. Here’s why I like them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

I think this pizza chain operator could be a fantastic option for investors. This is largely due to its strong market position and long term growth plans. Domino’s is aiming to grow its global store network by 7% to 9% per annum for the next 3 to 5 years and same store sales growth by 3% to 6% per annum. Looking longer term, by 2033 the company is targeting a total of 5,500 stores. This compares to the 2,668 stores it had at the end of FY 2020. If it delivers on these targets, then I believe it will lead to strong earnings growth over the next decade and drive the Domino’s share price notably higher.

Jumbo Interactive (ASX: JIN)

Another long-term option for investors to consider is Jumbo Interactive. It is an online lottery ticket seller and best known as the operator of the Oz Lotteries website. But there’s more to the company than this. As well as benefiting from the shift to online gambling in the Australian market, it has bold international expansion plans with its Powered by Jumbo software as a service (SaaS) business. Management notes that the global lottery market is worth US$303 billion a year, but just 7% of this market is online at the moment. Due to the quality of its SaaS business, I believe it has the potential to win a meaningful slice of this market over the next decade.

Pro Medicus Limited (ASX: PME)

A final option to consider is Pro Medicus. It is a provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups globally. It has been growing at a very strong rate over the last few years thanks to the continued adoption of its software by major healthcare institutions. This even continued in FY 2020 despite the pandemic, leading to Pro Medicus delivering a 23.9% increase in revenue from underlying operations to $56.8 million and a 33.4% lift in underlying profit before tax to $30.24 million. Since then it has announced a major contract win with NYU Langone Health. Given the quality of its offering and its burgeoning sales pipeline, I don’t expect this to be the last.

More reading

• Could this be the large cap version of the Brainchip (ASX:BRN) share price? 
• Turn $6k into $60k, a guide to growth investing
• ASX 200 drops 0.8%, Nearmap (ASX:NEA) sinks
• Pro Medicus (ASX:PME) share price higher on major contract win and research agreement
• Why IGO, IPH, Jumbo, & Whitehaven shares are pushing higher today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited and Pro Medicus Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, Jumbo Interactive Limited, and Pro Medicus Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking to construct a $100,000 share portfolio, you’ll no doubt be on the lookout for investment ideas.

To help you on your way, I have picked out a couple of shares which I think could be excellent core holdings. This is due to their strong business models and positive long term outlooks.

Here’s why I think investing some of the funds into these two shares would be a very smart move:

Altium Limited (ASX: ALU)

The first ASX share to consider as a core holding in your portfolio is Altium. It is an electronic design software provider and the company behind the Altium Designer platform. Subscriptions for this platform have been growing at a rapid rate over the last few years and recently surpassed the 50,000 mark. This strong growth has been driven by the Internet of Things (IoT) and artificial intelligence (AI) markets, which are underpinning an explosion of electronic devices globally.

But Altium isn’t a one-trick pony. It also has a number of other businesses supporting its growth. These include workflow solution platform NEXUS and electronic parts search engine Octopart. Given the favourable industry tailwinds and its leadership position in the electronic design market, I believe Altium is well-placed to achieve its revenue target of US$500 million in FY 2025/26. This compares to its FY 2020 revenue of US$189 million.

CSL Limited (ASX: CSL)

Another ASX share that I think would be a perfect addition to this portfolio is CSL. I believe the biotherapeutics company is one of the best blue chip shares that Australia has to offer. This is due to the quality of its CSL Behring and Seqirus businesses.

Although plasma collections are difficult at present because of the pandemic and are likely to weigh on immunoglobulin margins in FY 2021, I’m optimistic that increasing demand for influenza vaccines because of COVID-19 will help offset this. Looking further ahead, thanks to its lucrative portfolio of therapies and vaccines and lucrative research and development pipeline, I believe CSL is well-placed to deliver solid sales and earnings growth over the 2020s.

More reading

• 2 exciting ASX healthcare shares to buy for the long term
• 3 ASX growth shares I’d buy right now
• Bolster your portfolio with these outstanding ASX blue chip shares
• Why you should invest $5,000 into these ASX shares right now
• 3 retirement myths you can’t afford to believe

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Do you want to generate $1,000 a month in dividends? I believe it’s totally possible for your portfolio. You just have to remained disciplined and choose the right ASX shares.

Dividends are great

I think that dividends from ASX shares are great. It’s wonderful that we can get paid by our investments for no effort, except the initial investment.

Businesses can pay out dividends (or distributions) from their annual profits and retain some of the profit to re-invest for more growth.

I think it’s a good idea for most Australian companies to pay out a dividend. It’s nice for shareholders to receive cash payments just being part owners of the business. Some high growth businesses may need all of the available capital to fund growth, but larger businesses don’t need to retain all of their cashflow. 

Franking credits

Australian companies get particular advantages for making taxable profit in Australia. The country does have a relatively high company tax rate, however all corporate income tax paid can be used as a refundable tax credit (called franking credits) for Australian tax residents. Franking credits reduce the taxes owed by taxpayers who receive dividends. For some low income earners and retirees it can mean the entire franking credit amount being refunded to investors when they do their tax return.

Franking credits can turn a $70 dividend into a $100 grossed-up dividend after the tax return is completed.

Which ASX dividend shares are good ideas?

Different investors will have different opinions about which ASX shares are good ideas for income.

Some people are just attracted to large ASX blue chips which are seemingly safe dividend ideas like Wesfarmers Ltd (ASX: WES), Coles Group Limited (ASX: COL) and BHP Group Ltd (ASX: BHP).

However, as this COVID-19 period has shown, I don’t think some businesses can be relied on as dividend ideas because they’re not that defensive.

Below are some of my favourite ideas. Before I get into it, I just want to tell you that a listed investment company (LIC) is a company which invests in other businesses on behalf of shareholders. Here are my ideas for an ASX dividend share portfolio:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has a grossed-up dividend yield of around 4%. It’s a diversified investment conglomerate.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 4.4%. It is a diversified property business.

Future Generation Investment Company Ltd (ASX: FGX) has a grossed-up dividend yield of 6.6%. It’s a philanthropic, diversified LIC.

WAM Microcap Limited (ASX: WMI) has a grossed-up dividend yield of 5.6%. It’s a LIC which invests in small caps.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 4.7%. It’s a farmland real estate investment trust (REIT).

Magellan Global Trust (ASX: MGG) aims for a 4% distribution yield. It’s a globally-focused listed investment trust (LIT).

WAM Leaders Ltd (ASX: WLE) has a grossed-up dividend yield of 8%. It’s a LIC which focuses on large cap ASX shares.

If you bought an equal amount of each of the above ASX dividend shares your portfolio would be very diversified and it would have a grossed-up dividend yield of 5.3%.

What size portfolio would you need with a 5.3% yield to make $1,000 a month in dividends?

The dividend yield of your portfolio dictates how much income you’d make from it. If you had a $100,000 portfolio with a 10% dividend yield then you’d receive $10,000 of dividends a year.

If you had a $200,000 portfolio with a 5% yield it would pay $10,000 a year.

You’d need a portfolio worth $226,415 with a 5.3% grossed-up yield to get $1,000 a month, or $12,000 a year.

Of course, not many people have almost a quarter of a million dollars sitting around in cash to invest into shares. It takes saving, investing and compounding to reach that type of wealth. According to the Moneysmart calculator, it would take less than 11 years by investing $1,000 a month into ASX shares to reach a portfolio size of $230,000 if it compounded at 10% a year.

Of course, your portfolio could reach $230,000 faster if you invested more per month or identified investments better than the overall market (which is still a good wealth builder).

More reading

• 2 high yield ASX dividend shares to buy next week
• Is it time to save more or invest more in ASX shares?
• Why I think the Brickworks (ASX:BKW) share price is a buy
• 4 reasons why Rural Funds (ASX:RFF) is a great ASX dividend share
• 2 outstanding ASX 200 shares for your retirement portfolio

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, MAGLOBTRST UNITS, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It was a mildly positive week for the S&P/ASX 200 Index (ASX: XJO) last week. After a number of ups and downs, the benchmark index recorded a 0.1% gain to end it at 5,864.5 points.

A number of shares climbed more than most last week. Here’s why these were the best performers on the ASX 200 over the period:

Perseus Mining Limited (ASX: PRU)

The Perseus share price was the best performer on the ASX 200 last week with a sizeable 14.2% gain. This appears to have been triggered by a broker note out of Credit Suisse. Its analysts upgraded Perseus’ shares to an outperform rating with an improved price target of $1.60 after lifting their gold price forecasts to US$2,500 an ounce in 2021. This appears to have rubbed off on other gold miners, leading to the top four performers coming from the sector. Northern Star Resources Ltd (ASX: NST), Silver Lake Resources Limited (ASX: SLR), and Evolution Mining Ltd (ASX: EVN) round out the top four. This strong form led to the S&P/ASX All Ordinaries Gold index climbing a sizeable 7.4% over the five days.

Perenti Global Ltd (ASX: PRN)

The Perenti share price was the next best performer with a gain of 11% last week. Investors were buying the mining services company’s shares after it announced a major contract extension for its hard-rock underground miner business, Barminco. It has signed an 18 month extension at MMG’s Dugald River mine in North Queensland. Management estimates that it is worth $140 million.

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price wasn’t far behind with a 10.5% gain over the five days. Last week the automotive retailer announced plans to spend $105 million to buy eight car yards from property trust Charter Hall Group (ASX: CHC). The capital for the purchases is being provided by Toyota Financial Services ($175 million) and Volkswagen Financial Services ($50 million).

Blackmores Limited (ASX: BKL)

The Blackmores share price was on form and pushed 9.7% higher over the period. This was despite there being no news out of the health supplement company. However, prior to last week, its shares were down more than a third form their 52-week high. Some investors may believe they had been oversold.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These were the best performing ASX 200 shares last week appeared first on Motley Fool Australia.

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Unfortunately for income investors, it looks increasingly likely that interest rates will stay at close to zero for a number of years to come.

The good news is that there are alternatives to term deposits and savings accounts. At present, there are a number of shares on the Australian share market offering investors generous yields.

Here are two ASX dividend shares I would buy:

Aventus Group (ASX: AVN)

The first ASX dividend share to buy is Aventus. While retail property might not be something you would think to invest in right now, I would suggest you reconsider this. Aventus is a very different beast to other retail properties companies. It owns and operates 20 large format retail parks across Australia. Positively, these centres have a high weighting towards everyday needs. It counts major retailers such as ALDI, Bunnings, Officeworks, and The Good Guys among its 593 tenancies.

This weighting has proven to be a very positive thing during the pandemic and allowed Aventus to collect the vast majority of its rent as normal in FY 2020. This led to the company reporting a 4.2% increase in funds from operations (FFO) to $100 million. I’m expecting a similarly solid year in FY 2021. Based on this and the current Aventus share price, I estimate that it offers a generous 5% yield.

Rural Funds Group (ASX: RFF)

Another dividend share which has continued its positive form this year is Rural Funds. It is a real estate investment trust that owns a diversified portfolio of high quality agricultural assets across Australia. This includes macadamia orchards, cattle assets, cotton assets, vineyards, and almond orchards. These assets are leased to some of the most experienced agricultural operators in the country such as Treasury Wine Estates Ltd (ASX: TWE) and Select Harvests Limited (ASX: SHV). 

In FY 2020, Rural Funds delivered an 8% increase in property revenue to $72 million. This allowed the company’s board to increase its distribution by its target rate of 4% per annum. Pleasingly, more of the same is expected in FY 2021 thanks to its long term tenancy agreements and periodic rent increases. Management intends to increase its distribution by 4% again to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.7% yield.

More reading

• 4 reasons why Rural Funds (ASX:RFF) is a great ASX dividend share
• 3 retirement myths you can’t afford to believe
• Not sure about Westpac (ASX:WBC)? Buy these ASX dividend shares instead
• Why I would buy Telstra (ASX:TLS) and this ASX dividend share
• ASX dividend shares raising their dividends like clockwork

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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